All posts tagged Debt Ceiling

The White House has said it doesn’t believe it has the power under the 14th Amendment to bypass Congress and ignore the looming debt ceiling.

But what about minting a $1 trillion platinum coin – does the White House think that could work?

Facing repeated questions, White House spokesman Jay Carney declined to rule it out Wednesday, though he didn’t exactly encourage the idea either. Read an edited transcript of the exchange on WashWire. Read More »

The market chaos that followed Standard & Poor’s downgrade of U.S. credit got me thinking–was I giving my friends and family too much credit?

I had been raised to give people credit, in both monetary and metaphorical terms. I rarely ask people to pay me back if I pick up a check for a meal; I even included two pages of acknowledgements (the ultimate credit) in my last book. I mean, I give and I give. But if S&P was saying that America’s credit had fallen, didn’t it stand to reason that I needed to reassess the credit levels of the Americans that I knew?

I decided to send this message around to some of my friends and family members via email, just after the markets closed on Monday.

Hey I’ve decided I’m giving my friends and family too much credit. I’m putting you on notice that I may have to downgrade your rating from AAA to AA+ with a negative outlook. Let me know if you have any comments.

I got my first response back, from one of my old college roommates, within minutes. Read More »

It may seem odd to seek the advice of a man who died back in 1804, but as Treasury Secretary from 1789 to 1795, Alexander Hamilton was the policymaker most responsible for bringing yields on government bonds down from more than 100 to less than 6 percent. The circumstances that the U.S. government faces today are not very different from those Hamilton faced 222 years ago. I believe that he would respond to the recent downgrade of America’s credit by Standard & Poor’s with an analytically simple but politically difficult two-step program.

Yesterday’s much-anticipated S&P downgrade of U.S. treasury bonds is obviously a historic event.

It seems the world has spent the years since 2008 stumbling from one debt crisis to another. In fact, if we count the Third World debt crisis, which did after all affect most human beings on the planet, the world has been in a continual series of debt crises since the ‘70s. The difference is that until very recently, the U.S. was the ultimate arbiter of who owed what to whom, and on what terms. 2008 marked the moment when that began to change. Yesterday’s downgrade of T-bonds that had long been treated as literally as good as gold by the world’s central bankers marks the first full, public admission that this is no longer the case.

About Speakeasy

Speakeasy is a blog covering media, entertainment, celebrity and the arts. The publication is produced by Barbara Chai and Jonathan Welsh with contributions from the Wall Street Journal staff and others. Write to us at speakeasy@wsj.com or follow us on Twitter at @WSJSpeakeasy or individually @barbarachai.